Swedish IPO frenzy propels stock market into Europe's big league

Sweden

SWEDEN'S not only one of the best-performing equity markets in Europe this year. It has also become the country that offers investors the most choice when it comes to picking stocks.

Sweden - with a population of 10.2 million people - now has almost 1,000 listed companies, according to data compiled by Bloomberg. That's the most in the European Union, outstripping much bigger countries such as Germany and France.

More than 80 per cent of them are small caps, with market values of less than US$1 billion. The list is getting longer, with initial public offerings in the works from caller-ID app Truecaller and investment firm Storskogen Group AB, even as some investors start to question whether the market is in a bubble.

Sweden is heading for its busiest year for IPOs in more than two decades. The vibrant market for smaller companies reflects the Nordic nation's thriving startup scene, less-cumbersome regulation and deep investor base, according to Jonas Strom, the Stockholm-based chief executive of investment bank ABG Sundal Collier.

Sweden has a "unique eco-system of investors", Mr Strom said in an interview. "Here, there are many smaller professional investors that don't need a 100-billion-euro transaction but are happy with 50 million euros."

Still, like many smaller markets, Sweden has seen some of its most promising startups look abroad. Music streaming company Spotify Technology SA and oat-milk maker Oatly AB both listed in the US in recent years. Bankers will be watching to see if the next wave of unicorns, including US$46 billion lender Klarna Bank AB and payments firm Trustly, do the same.

Plenty of other businesses are content to stick close to home. So far this year, 83 companies have gone public in Stockholm, raising US$6.4 billion. BLOOMBERG